HealthSouth Corporation is located in Birmingham, Alabama and it is the largest operator of the inpatient hospitals. Their business model incorporates three major businesses: rehabilitation, hospitals and surgery. Lower cost and the atmosphere, which reminds a spa rather than a medical institution, made HealthSouth one of the most successful companies in Alabama already in the first few years of its existence. However, the outstanding performance of the company was not always supported by the actual success. Today Aaron Beam, co-founder and former CFO of HealthSouth, remembers the time, when he was forced to falsify accounting reports in order to meet performance targets. Looking back at his work in HealthSouth, Beam cannot help but compare the situation in the company with the recent economic events. When an organization shows the first signs of the ethical collapse, such as the fear of intimidation and the pressure to falsify data, the end is inevitable according to Beam. However, when the scale of the catastrophe is limited to one company only, we tend to speak about fraud and condemn the few guilty managers, however, when the whole economy follows the same path, it is only considered an economic trend.
In his speech Beam suggests that “in the heart of the recession is greed”, just like in the centre of almost any deceit. People tend to believe more and more that the ends justify any means, while profitability become the ultimate goal. Thus, the subprime mortgage crisis, which shattered global economy for years, was the result of a sophisticated combination of lies, which aimed to conceal the real information about the mortgage quality. Meanwhile, financial institutions derived short-term profits, being completely aware of the fact that the mortgage pyramid is nothing but a ticking bomb, which can explode at any moment. Although in the beginning Beam’s speech seemed to be focused on his career in HealthSouth, its real message suggests the necessity for everyone today to go back to the original definition of success as “being generous, prosperous, healthy and kind” and not to target profitability at the expense of own ethical principles.
References
Beam, Aaron. Ethics and Fraud at HealthSouth: Lessons from Inside a Corporate Meltdown.
Stanford Graduate School of Business, 2011. Web. 14 Nov 2011.
